7 Lame Reasons People Spend More Than They Make

Personal finance isn’t exactly rocket science. We all pretty much understand the basic concepts of living below our means, budgeting, tracking expenses, etc. But, even as straightforward as these concepts are, there are still plenty of people out there in debt and spending more then they make. So, here are seven lame excuses we hear, or we use ourselves, about why we spend more than we make.

# 1 – I don’t know where my money is going!

This is because you’re not keeping track of where it’s going. It’s amazing to me the number of people who don’t know where their money goes to. Personally, I found I was in this frame of mind when I did the cash budgeting system, which is why it didn’t work for me. I like the ease and convenience of having my expenses easily tracked when I use my debit and/or credit card so I know exactly where my money is going every month. If you’re always wondering where your money goes, it’s almost guaranteed you’re spending more then you make. Cut the excuses and start keeping track of your expenses!

# 2 – I don’t have/need a budget…

I had someone tell me the other day they didn’t need a budget. I wanted to reach across the counter and throttle them. It’s a well known fact that social security in America isn’t going to be around to fund retirement much longer. It’s up to us to take personal responsibility for our retirement and one of the ways we do that is to save. Well, how do we save? By spending less than we earn. And how do we do that? Budgeting, of course. It’s all connected, but people don’t seem to bridge the gap from budgeting to saving for retirement, and that’s just one reason of many to do so. Everybody needs a budget. The reason they don’t think they need one falls into the next category…

# 3 – I don’t know what my financial goals are…

Not having clearly defined goals can be one of the biggest reasons we overspend. If you have no plans for anything, then money is treated with little regard. On the other hand, when you know you’ve got to save every extra penny for that 20% down payment on the new house, you’re going to question your purchases and often your impulses. When you have a goal you can stop and ask yourself whether spending the money will help you achieve your goal or detract from it. So, before you can do anything about your finances, you have to know what your goals are.

# 4 – Something always seems to come up…

I know we’ve all heard this one before. This is the one where miscellaneous expenses are treated like an emergency. You had to buy the present for the little kid who invited your son to their birthday party. You had to take the cat to the vet (though, sometimes this can be a legitimate emergency!). You had to replace the dishwasher. 99% of the time, these are not emergencies, but because we do not budget for the miscellaneous in our lives, we use what we would normally put in savings for this stuff. And it adds up, too. Make a budget and stick to it. Period. Unless it is a real emergency, don’t spend the money.

# 5 – I want to enjoy my life now…

I’m totally guilty of this one. Instant gratification. This is tough because, as a society, we’ve gotten used to getting what we want when we want it. We’ve gotten away from the good practices of our grandparents who saved for the things they wanted. We don’t worry about today what can be put off until tomorrow. But, this constant obsession with wanting to have things NOW is a big drain on our finances and a huge factor in why we spend more then we make. Now, I’m not talking about having the money and spending it on something you want, though even that can be dangerous. I’m talking about not having the money and no savings to speak of, then going out and buying that big screen TV. I think it’s critical to our well-being to enjoy life, it keeps us motivated and happy. But, I don’t think it’s critical to spend money in order to enjoy life.

# 6 – Well, my neighbor has this…

Keeping up with the Joneses is getting old. Who cares what your neighbor has, they aren’t you and you aren’t them. Figure out your own life and live within those means. Many of us are very competitive by nature and the result is that we may spend more money then we can afford in order to out-do someone else. But, a lot of times, that competitiveness can cost you more than you care to spend. A lot of times, this goes even beyond a financial handicap. Still, in terms of personal finance, it will drain your savings if you’re lucky enough to have one. It will cause you debt if you don’t. Drop the habit and worry about your own challenges.

# 7 – I don’t earn enough…

Or maybe it’s that you just spend too much. This is a real common excuse that people use for why they spend more then they make. But, the reality is that our spending habits are what we have the most control over. Yes, sometimes we can work towards a raise, set up passive forms of income, or even take on second jobs – all of which increase our income. However, sometimes those options are not available to us and the only thing we have left to control is the amount of money we spend. I always challenge those who say they need more money to sit and look at the areas they can cut their spending first. It’s not the money you’re making, it’s the money you’re spending. I understand working a minimum wage job is tough when you’ve got a car payment, rent, bills, and you need food. But, the bigger question is how did you get to the place where you have all of those bills and can you get back to a place where you don’t. In some cases, people just need more income and that’s where second jobs come in handy, but sometimes it’s just a matter of not spending any extra money on frivolous things.

Take a look at your finances. Do you find yourself using these excuses? If so, it may be time to re-evaluate your situation and consider that your spending is more likely the culprit then your income.

Can you think of any other excuses people use for why they spend more then they make? What advice would you give to the folks using these excuses?

4 thoughts on “7 Lame Reasons People Spend More Than They Make”

  1. You could also have added #8 Because it gives them the illusion of wealth.

    I know some people who love getting out the credit card and buying something. To their minds by purchasing they are demonstrating wealth. Of course it’s all borrowed on high interest rates. But still, people like to pretend.

  2. Great list.

    Here’s another lame excuse for spending too much is(goes with #4):
    “It’s only temporary. I’ll get my spending in check when things get back to normal.”

    The only thing that will become normal is the increased spending.

  3. Kristy you may want to do a little fact checking on item #2. Although one does need to save for retirement, I’m not sure why you feel social security won’t be around. You should check out the annual trustees report to see that the prgram can pay full benefits through 2042 and can pay more than is payed now through the future, although less than is promised. Only a 1% increase is needed to bring the program with all promised benefits into solvency. No medicare is another problem. Check for yourself.

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